Prudential to demerge UK & Europe arm and sell £12bn UK annuity portfolio

Mike Wells

Shares of Prudential plc (PRU.L) were gaining around 5 percent in London trading after the UK-based financial services group reported Wednesday higher profit in its fiscal 2017 with increased premiums and strong growth in Asia.

James Mullins Partner and Head of Risk Transfer Solutions at Hymans Robertson commented on the transaction, "Today's announcement that £12 billion of Prudential's existing annuity portfolio will transfer to Rothesay Life, combined with the recent news that Phoenix is taking on Standard Life's annuity portfolio means that the total value of annuity liabilities taken on by the eight insurers now active in the buy-in and buy-out market is expected to be around £40 billion in 2018, before allowing for any further consolidation of insurer annuity business".

Mike Wells, group chief executive, commented: "Our businesses share common heritage, values and goal".

Prudential says the demerger will result in two separately-listed companies, "each with its own distinct investment prospects".

The transaction covers an annuity book containing roughly 400,000 policyholders, making this the largest transaction of its kind in the UK.

The move was made after "a rigorous review" by the board, which concluded it is in the best interest of the group to operate as two separately listed firms and allow each other to focus on their individual strategies, said Paul Manduca, Prudential's chairman. John Foley, who now heads up the M&G Prudential division, will steer that business through the demerger.

More news: Oil up, but Opec sees rapid growth in rival supply

In line with the demerger, Prudential also announced on Wednesday that M&G Prudential has agreed to sell £12 billion of its United Kingdom annuity portfolio to Rothesay Life.

Under the agreement, the group's M&G Prudential arm has reinsured £12 billion of liabilities to Rothesay Life, which is expected to be followed by a Part VII transfer of the portfolio by the end of 2019.

Meanwhile, Prudential, under the stewardship of group chief executive Mike Wells, will focus its efforts on the Asian, US and African markets.

When the merger completes - subject to shareholder and regulatory approval - shareholders will have holdings in both Prudential and M&G Prudential.

He added: "The separation of the United Kingdom and European unit will enable each business to hone in on specific strategic objectives".

"In Africa, Prudential has established operations in five countries since 2014, with a substantial opportunity to serve the rapidly expanding customer demand for long term financial solutions", Prudential said. We believe this shows the United Kingdom market has matured, remains very competitive and can cope with this kind of change.

Related News:

  • Enyeama condemns Lille pitch invaders

    Enyeama condemns Lille pitch invaders

    Lille is in danger of being relegated from the French Ligue 1 and sit second from bottom with 28 points from 29 games. But, instead, Lille is in 19th place and fighting to avoid relegation with only nine games left.
    Venus Williams advances to the last eight in Indian Wells

    Venus Williams advances to the last eight in Indian Wells

    It was the match of the tournament as with Venus taking the first set 7-5 before Serena bounced back to take the second 6-4. It was also their first duel at Indian Wells , 17 years after Venus pulled out of their semifinal with a knee injury.
    YouTube To Use 'Information Cues' To Combat Fake News

    YouTube To Use 'Information Cues' To Combat Fake News

    Expect to see Wikipedia links in videos promoting conspiracy theories and issues that are very likely to spark heated debates. Essentially, these "information cues" will be small cards that appear directl below videos in the YouTube app.
  • Forecast: Warm and windy today in the Omaha area

    Forecast: Warm and windy today in the Omaha area

    Blustery, with a west wind 16 to 20 miles per hour , with gusts as high as 39 miles per hour . West, southwest wind 10 to 18 miles per hour with gusts as high as 25 miles per hour .
    Here are the local nominees for the 2018 James Beard Awards

    Here are the local nominees for the 2018 James Beard Awards

    Gerard Craft of Niche won "Best Chef: Midwest" in 2015 , and Kevin Nashan of Sidney Street Cafe took the same award a year ago . Post-Dispatch restaurant critic Ian Froeb is a member of the James Beard Awards restaurant and chefs awards committee.
    McTominay called up to Scotland squad

    McTominay called up to Scotland squad

    Speaking at Hampden Park after announcing his squad, he said: "They are definitely prepared". He added: "It was enormously flattering, there's a huge interest in the national team".
  • Shadow Of The Tomb Raider Details Leaked

    Shadow Of The Tomb Raider Details Leaked

    A film based on the rebooted gaming series will release in the United States on March 16, starring Alicia Vikander as Lara Croft . However, there are some people who apparently think there is one, or two, things holding her back from her full Croft-potential.
    All Scots Toys R Us stores to close down within weeks

    All Scots Toys R Us stores to close down within weeks

    However, it added that no suitor materialised in what is proving to be a dire time for high street retailers. The Sun Online has contact Toys R Us and we are expecting a statement shortly.
    Federal appeals court's ruling upholds most of Texas'

    Federal appeals court's ruling upholds most of Texas' "sanctuary cities" law

    Attorney General Ken Paxton , who had defended the law in court, said he was pleased with the ruling . Unsafe criminals shouldn't be allowed back into our communities to possibly commit more crimes".
  • Claire Foy Paid Less Than Matt Smith for 'The Crown'

    Claire Foy Paid Less Than Matt Smith for 'The Crown'

    Smith was nominated twice, with Foy, for Screen Actors Guild awards for performance in an ensemble for The Crown . The path certainly looks brighter for Foy's Season 3 and 4 replacement Olivia Colman, however.
    NPHS Student's Response to After School Walk-out Plan at NPHS

    NPHS Student's Response to After School Walk-out Plan at NPHS

    Andrew Cuomo will be joining some of them at two schools in Brooklyn and Manhattan, CBS2's Janelle Burrell reported. The date marks one month since the mass shooting at Majory Stoneman Douglas High School in Parkland, Florida.
    Ravens to release Danny Woodhead

    Ravens to release Danny Woodhead

    For the first time since he was limited to just three games in 2014-15 did Woodhead fail to find the end zone in a season. He had 56 yards on 14 carries and 33 receptions for 200 yards in eight appearances during the 2017 season.


Most liked

Met Office issues snow and ice warning for Derbyshire
Cold air from the Arctic is heading to the United Kingdom - and we're set to see more snow and ice in the region this weekend. The Met Office has issued a warning for the region on Friday and Saturday - as the Beast from the East is set to return.

Winter Storm Warning In Effect Tuesday Evening
Orange and Ulster will see high temperatures in the upper 30s on Tuesday , while Sullivan can expect highs in the mid to low 30s. Scattered snow showers will continue on and off through the day Wednesday , with most areas seeing well under an inch of snow.

United States northeast braces for third powerful storm in two weeks
Joe Rotella ducked into a train station as he tried to find his way to a hotel that's hosting a convention where he's speaking. Charlie Baker wrote on Twitter. "I know folks are tired with power outages but hang in there with us", the governor said.

Broadcom ends bid for rival Qualcomm after Trump intervention
Companies including Qualcomm and China's Huawei have been investing heavily to stake their claim in the underlying technology. Congress issued a critical report on the Chinese tech firm in 2012 that effectively shut it out of the U.S. market.

Grab makes foray into fintech and financial services
The loan capability is possible thanks to the joint venture between Grab Financial and Credit Saison, one of Japan's largest consumer financing companies.

Women's basketball earns first-ever NCAA No. 1 seed
Quinnipiac is seeded No. 9 in the same region and will open at Gampel against No. 8 Miami on Saturday at 1:30 p.m. We are all excited at the chance to play in the postseason for the fifth time in the last six years.

Meghan McCain calls Clinton family 'virus' in Democratic politics
Another former aide told the publication that it seems "the party has moved on from Hillary Clinton ". In other words, Reines knows that Trump's messages resonated deeply in the heartland of America.

Apple buys 'Texture' Magazine Subscription App
Previously, Apple had a Newsstand app of its own, but the service never took off, and Apple chose to just terminate the service. The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014.

Miley Cyrus sued for $300 million over 'We Can't Stop' copyright infringement
May is seeking a trial by jury, plus a halt to sales and performances of Cyrus' song as well as damages and legal fees. Listen to both songs below and judge the alleged similarities for yourself.

Jeff Goldblum is back in Frontier's Jurassic World Evolution
Jurassic World Evolution will feature an all-new story that will mention key characters and events from the Jurassic World series. Goldblum is also reprising his role of Malcolm for Jurassic World: Fallen Kingdom , which releases in movie theaters on June 22.

Slovakia may face early parliamentary elections
The junior nationalist coalition party SNS said on Monday that it could accept either early elections or a cabinet reshuffle. A coalition partner had made Robert Kalinak's resignation a condition for continued support in government.

Erdogan hopes Afrin to be captured by Wednesday evening
It's a major issue of conflict for Turkey and the US that is expected to be discussed between the two countries later this month. Damascus has dubbed the Turkish campaign as "aggression", however, refrained from sending armed forces to the area.

Trump tells people he is selecting Larry Kudlow to replace Gary Cohn
Liddell, like the former Goldman Sachs executive Cohn, has a background in crunching numbers and dealing with Wall Street. Cohn played a central role in helping Trump enact a sweeping tax overhaul law, coordinating with members of Congress.

Former S.Korean president Lee appears for questioning over graft charges
The ex-president rose to political power after a successful career as chief executive of Hyundai Engineering & Construction Co. Before he entered the prosecutors' office, Lee announced to reporters that he is in a "position of awful discomfort today".

Pre-registration Started for Westworld the Mobile Game
Westworld is based on the HBO original series and is being produced by WB Games San Francisco and Kilter Films. Watch Westworld FREE With a 7-Day Risk-Free HBO Trial! Pre-registration has opened for Westworld .